Sun, Wind and Desert E-Book

Paul van Son

• Herausgeber: Books on Demand
• Kategorie: Geisteswissenschaft
• Sprache: Englisch

Seitenzahl: 244

Veröffentlichungsjahr: 2023

Beschreibung

There is no shortage of climate-neutral energy. There is only the global task of tapping climate-neutral energy sources both locally on a small scale and globally on a large scale and connecting them to the centres of consumption. This book focuses on the enormous potential in Europes neighbourhood. The huge, very cost-effective and secure solar and wind energy from the deserts of North Africa and the Middle East North Africa (MENA) will be developed developed - by local governments partnering with (international) companies - at a great pace. At the same time, offshore wind energy in Europes seas will become the mainstay of energy supply for our industry.

Leseprobe

The MENA Region: Source of Renewable Energy in our Neighborhood

Table of contents

Chapter 1

Powering the World without Greenhouse Gases

Our wonderful planet is about 71% covered by water and 29% by land, of which 33% is deserts. More than 8 bn of the world’s population are basically spending their live on the remaining land areas, where they have traditionally found and used the energy for their living. Although the sources of energy have migrated from "what nature offers each day" to “digging fossils”, the energy sources that we all use are still mainly land-based (whereby deserts deliver part of the oil and gas supply).

People use energy just for surviving, for any additional sophistication of life or perhaps simply for wasting it. That is usually referred to as "energy demand" or "energy need". For some energy is just there, abundantly available, affordable and obvious. They are used to plenty of gasoline for their cars, natural gas for heating, power for cooking, refrigerators, smartphones and so on. For others, getting access to energy, let alone clean and healthy energy, is a daily struggle. In the end, ever more humans claim an expanding need of energy "to make the world go around". The awareness of environmental effects of using ever more (fossil) energy used to be modest, but recently it is growing due to emerging climate disasters.

Natural resources - sun, wind, hydro, biomass and waves - have not only enabled humankind to survive, but also to live a highly sophisticated life and to build fabulous civilizations. Since the industrial revolution, only a few centuries ago, the exploitation of hundreds of million years old fossil carbon, coal, lignite, oil and natural gas, has given an unparalleled boost to development and growth. Since the mid-twentieth century nuclear energy has been added to the global 'energy package’.

To date, the world population is served by more than 170,000 TWh energy production annually. About 80% comes from fossil sources, 10% from nuclear and the remainder from natural origin. In only a few centuries the world’s energy supply has, therefore, migrated from 100% ‘natural’ to mainly ‘fossil-based’, a bit of nuclear and a modest portion from natural origin. The use of the quasi-unlimited natural energy resources - wind and solar from oceans, seas and deserts - is still insignificant. Pre-industry emissions used to be about net zero, whereas to date the excessive use of fossil energy is dumping more than 37 bn tonnes CO2 emissions yearly in the atmosphere. This does not even include other energy sector related greenhouse gases such as methane and nitrous oxides.

The debate about sustainability of the global energy mix is at least 50 years old. The Club of Rome published in 1972 its report ‘Limits to Growth’ in which approaching limits to fossil energy were highlighted. Nuclear was then hinted as a more sustainable alternative. Natural sources, mainly renewables, were in those days not really believed to offer a viable answer due to their high costs and uncertain supply. The use of fossil energy has only grown ever since, whereas nuclear, disappointingly failed to conquer a dominant role in the energy portfolio.

In 1990, the Intergovernmental Panel on Climate Change (IPCC) of the UN pointed cautiously to the consequences of climate change due to excessive production of greenhouse gases. Years of confusing debates about whether the effects of greenhouse gases would really be that dramatic did not help to reduce emissions effectively. The planet lost time. Many years of massive burning of fossil fuels has increased the CO2 concentrations in the atmosphere from 280 parts per million (ppm) in the mid-18th century to 417 ppm in 2022. In the “Paris Agreement” of 2015, almost all countries in the world committed to take action to limit global warming to 1.5 degrees, if possible, and well below 2.5 degrees compared to the pre-industrial level of 1850. However, it has still not been specified imperatively enough how this goal is to be achieved in concrete terms. As a result, it is believed global emissions will further rise until 2025 and will thereafter decline. An increasing number of countries is committing to 'net zero’ emissions by 2050 or 2060.

A decline of emissions would first require less energy consumption, capturing of greenhouse gases and a transition to emission free sources such as renewables and nuclear. Nuclear may increase its role, but that would require the solution of a number of controversies. The revival of natural sources to regain their (pre-)historic role as the main supplier of energy was until recently regarded with great disbelief. Who would have given only a decade ago a penny for optimistic statements claiming that solar, hydro and wind would one day replace oil, coal, gas and lignite? On the contrary, established beliefs prevailed that in the end only fossil energy could secure the energy supply for the world population. The industry and political arena used to claim, and partly still claim, that the climate issue should not be exaggerated and better not be factored in as an economic factor in energy markets (sic). Although carbon pricing schemes have been introduced, such as ETS in 2005 in the EU, the harmful effects of emissions are still not sufficiently incorporated in global energy pricing to date. This constitutes in fact an ongoing major distortion of markets as it allows harmful energy to compete on an equal footing with clean energy.

The free trade of abundant, relatively cheap fossil energy, sourced in oil-, gas- and coal-rich regions, notably OPEC countries and the USA, have, therefore, maintained a general feeling of 'security of supply forever’ in many parts of the world. However, the sudden Russian-Ukraine conflict in 2022 has produced a harsh wake-up call. Highly self-confident demand centres, such as the EU and Japan, found themselves suddenly exposed to fossil energy delivery shortages and price escalations. Unlike a rather indirect climate threat, galloping fossil energy prices are immediately hurting citizens and industry. Energy security and affordability moved quickly to the top of the agenda for the benefit of renewables and, in a way, nuclear. The no less important, existential topic of "climate change" provisionally comes second place, until perhaps the next tangible climate disaster.

Example: Germany

If energy security is threatened, notorious energy importing countries like Germany, one of the world's most important industrial nations, are hit the hardest. The "land of the economic miracle" depends on imports for about 70 per cent of its energy consumption, which still comes almost exclusively from fossil sources. Germany, the land of Goethe and Schiller, and also the inventor of the "Energiewende" (energy transition); a pioneer in renewable energies; a land of technical innovations and deeply rooted engineering skills. Finally, it is the country that has abandoned nuclear energy, but on the other hand is still a major emitter of greenhouse gases due to the massive use of lignite and hard coal as well as oil and natural gas. Germany is one of the top six emitting countries in the world after China, the United States, India, Russia and Japan. In 2022, C02 emissions worldwide will reach a new record level of 37 billion tons of C02 or 58 billion tons of greenhouse gases (C02e). Germany is annually adding 666 million tons.

There is hardly a country on earth where the topic of energy is discussed as intensively, emotionally, and controversially as in Germany. If, for example, people in France, Greece, the United Arab Emirates or Morocco are asked how they feel about energy, a very emotional answer would be rather surprising. In Germany, on the other hand, the keywords of the discussion are omnipresent: fossil fuel "dirty plants", phasing out nuclear energy, radioactive waste, dying forests, the clouding of the landscape by wind turbines, electro smog from power lines and the widespread rejection of any large-scale plant. Nuclear energy has become a taboo subject in Germany, after long controversial phase-out, re-entry and re-exit discussions. In neighbouring France, for example, things are quite different. There, nuclear plants are generally well accepted by the population, even if these power sources that the country is heavily relying on perform disappointingly and waste and decommissioning issues are still unsolved.

Energy Dependency

Share of Imports in Primary Energy Consumption

Europe's energy supply is dependent on imported energy. This situation will not change fundamentally even with a rapid expansion of renewable energies. Source: Eurostat

EU and MENA, natural partners

The EU is dependent on energy imports for about 60 per cent of its energy. Energy, whether fossil or green, can in principle be imported from all corners of the world. It is abundantly available in large parts of the world.

Today, the energy used in Germany mainly originates from imported hard coal, natural gas or LNG (liquefied natural gas) and oil or oil products. Electricity imports or electricity exchanges only exist to a modest extent. However, extended imports of energy sources based on fossil carbon cannot be the solution, because apart from price exposure, this ultimately would lead to further carbon dioxide emissions.

The energy mix in Middle East and North Africa (MENA) countries comprises about 94% of oil, natural gas and coal. In oil and gas rich countries, the population is generously and comfortably served by energy at low tariffs. For them, energy is business as usual. Energy saving, or better, avoidance of wasting, is not prominently present in their mindset. In energy-importing countries, the energy situation is less comfortable, if not harsh. Governments are exposed to social unrest risks which they try to mitigate with subsidy balancing acts. In the absence of realistic price signals the awareness of the real value of (clean) energy is very low. Climate and emissions awareness is perhaps even less developed in the MENA populations. This is in sharp contrast with Europe and other heavily industrialized regions. In MENA, emissions are still "free". There are hardly any governments plans to factor in climate effects into the energy prices and/or to set hard limits to emissions.

MENA, the green supplier of the future

We have pointed to the fact that in Europe's immediate neighbourhood, North Africa and the Middle East (MENA), huge solar and wind power plants are being built that will initially feed into the local grids. Here, solar power is already being produced at a cost of less than one euro cent per kilowatt hour. Even the greatest optimists would not have expected such a cost degression possible 10 years ago.

It is no longer unrealistic to believe that the region can provide large amounts of green energy for the EU and for the global markets in the long run. A rudimentary infrastructure for serving the EU already exists in the form of power lines and pipelines. Expanding them is technically and, in ever more business cases, economically feasible. The political framework conditions appear difficult at first glance, but on closer inspection they do not stand in the way of positive development.

If the countries of the EU are already quite different culturally and economically, the differences among MENA countries are even larger. The range from prosperous to poor, stable to turbulent, investment-safe to high-risk is far wider than in the EU. The Arab League, with its 22 members, hardly plays a coordinating role as an umbrella organisation. Only in the Gulf States (GCC) can you speak of any coordination; international activities and business transactions, however, take place mainly bilaterally here as well.

The MENA region is well-known in the industry as a large, reliable supplier of oil and gas; but to the general public in Europe, it is more known as a sunny holiday destination, with quite different cultures and regimes.

It is not easy for companies from Europe to build business in the MENA region, but many companies, both large and medium-sized, confirm that an initial lean period is worth it to build long-term relationships with Arab partners. Today, apart from oil and gas imports, Europe does surprisingly little business with its Arab neighbours, whose people have shown to the authors of this book such warm hospitality. This is bound to change because of the great potential synergies between the two areas. In this book, we therefore take a closer look at the most important MENA countries to better understand the development opportunities.

Local and Global Developments

As the energy transition dictates major changes along the value chain from energy sources and conversions, e.g. to hydrogen and e-fuels, transport, storage and demand, there is much debate about the best fundamental structure of energy systems. Self-sufficient energy supply of a region or a country may be possible, but more synergies may be captured through regional networks, which, like today’s oil and gas world, will be connected to the world energy markets. In this period of transition from the “old school oil and gas" industry to “climate neutral supply", a spread of local, regional, international and intercontinental solutions for energy supply are emerging. This includes the development of "local energy hubs“ in areas with abundant clean energy, the cost-effective transport of climate neutral energy, e.g. green hydrogen or ammonia to remote markets, or, in the opposite direction, the relocation of energy intensive processes towards the cheap climate neutral sources. "Decentralised" (small, local and hybrid) will, therefore, be playing together with "centralised" (large scale, remote, and globally traded) commodities. In the coming decades the world will, therefore, undergo major shifts in the energy systems and markets, from polluting and emitting to environmentally friendly. From local to global markets and vice versa. From high value small infrastructure to large economy of scale infrastructures. From local hubs to world market orientated ports and network nodes.

World Powers Are Taking Action

The Russian invasion of the Ukraine has sparked political responses relevant to energy markets and emission reduction. It has become clear to the international community how fragile the energy edifice is. OPEC, (Gas Exporting Countries Forum (GECF), the US are among the energy winners in the sense that they could raise and extend income from oil and gas. Countries such as China, a long-term winner in the solar and wind energy industry, is benefiting from importing oil and gas at better conditions and exporting of solar and wind technologies. The EU, China, South Korea and other energy importing countries are under pressure, but they use the momentum to reduce their energy dependency. In addition to crisis management, the EU is reinvigorating its long-term perspectives within the framework of the "REPower EU" programme (ending the energy dependence from Russia) and the "Fit for 55" goal (55 per cent greenhouse gas reduction by 2030) on the road to a society without damaging emissions.

A Net-Emission Free Energy Supply is Feasible

The road toward climate neutrality is paved with numerous obstacles, but the good news comes from science and from the energy markets themselves. System studies and plans for the international markets (e.g. by Prof. Christian Breyer LUT, Prof. Ad van Wijk, TU Delft and Frank Wouters, Dii Desert Energy, among others) show that a 100 per cent emission-free energy supply is now not only easier to realise, but in particular is much more cost-effective than the traditional fossil-based energy systems. Since LCOE costs of solar and wind power in MENA have dropped far under the production costs of fossil or nuclear power, they are already making climate protection affordable. That is not to say that fossil fuels are chanceless. They may continue to play a role, provided any related emissions will be captured stored and/or reused (CCUS). However, the economic viability of consistent and leakage-free CCUS is still questionable. Nuclear energy remains an important energy source in many countries and also an option for the future, but economic viability, risk mitigation and acceptance remain subject to controversial debate.

The pioneers of energy transition of some decades ago will remember the quasi-impossible uphill battles against the fossil fortresses. Fifteen years ago, large plans were initiated by industry groups, such as Poseidon in the Netherlands, targeting large-scale energy supply from offshore wind in the North Sea, and Desertec in Germany, targeting imports of green power from the MENA deserts. At the time these were rather seen as exotic dreams, outlined on paper and in Power Point presentations. Calculations by renowned institutes worldwide showed convincingly that the sources of renewable energy in seas, oceans and deserts are abundant, but that technology was not yet economically viable at the time. In those days the idea was mainly to transport large amounts of remotely produced electricity via long distance DC cables to the demand centres. To date, the trend in the industry is shifting in the direction of converting power to hydrogen, perhaps e-fuels and then to transport energy molecules through gas and liquid gas infrastructures. Hydrogen, a highly promising energy carrier, with the capabilities to connect remote energy markets and industries, is expected to cause a revolutionary paradigm shift in the global energy supply.

Numerous learning curves have been traversed in the past decades, but in the meantime, implementation has become easier and more economic from year to year. Although there are still hurdles to overcome, they are no longer able to block the energy transition.

“We must fight emissions, not oil and gas.

(Energy Minis ter Al Mazrouei, UAE)

The fossil sources that remain economically active are moving along well-trodden paths and cannot easily be displaced. The volume of the global oil and gas market was estimated at 7,330 billion dollars for 2022. The interests of the fossil industry are therefore huge. It is therefore important that energy transition is not seen as an enemy by the fossil industry, but as a perspective for the future. The path to climate neutrality should therefore not necessarily imply “no carbon", but rather “no net emissions", in short: “net zero". Each industry can, therefore, pursue its climate neutral business strategies with the interweaving of fossil, renewable and nuclear energy.

Smart Solutions for Complex Challenges

Civil society, politics and industry in all countries face difficult dilemmas and have to perform a difficult balancing act among the populations at large. It is a choice between plague and cholera: climate protection, energy security, affordability and jobs have to be balanced. How can politics set a balanced, climate-friendly path and offer prospects when civil society and industry are suffering from considerable price pressure? Only very few would ultimately accept an economic collapse with the loss of numerous jobs for the sake of climate protection. How can we avoid energy poverty, and how can industry survive or find new perspectives?

The trend today is quickly moving towards renewable energies, as they are more cost-effective than nuclear energy or fossil fuels, including the necessary capturing or re-use of emissions. The biggest challenge in the use of renewable energies is therefore no longer cost, but how to cope with volatility. The sun doesn't shine at night and the wind doesn't always blow. This sometimes leads to extreme price fluctuations on the electricity markets and requires greater flexibility on the supply side through controllable production (e.g. hydropower), short and long duration storage and the exchange of electricity across borders. However, it is essential that this change is also accompanied by a flexibility of consumption, for example through price signals.

Today's energy systems are about 25 per cent based on electricity (electrons). Of this, less than 30 per cent on average will come from renewable sources in 2023. In the future, coal, oil and natural gas will be partially replaced by net-emission-free hydrogen or net-emission-free e-fuels produced with it. This is probably why hydrogen is also called “the new oil". The energy transition no longer allows any hesitation, purely for economic reasons.

Leading Questions

This book is intended to help find some answers seen from the point of view of the MENA deserts and some of the seas around Europe, and to understand essential questions, including: How can the world sustainably secure its supply? Do the deserts in the MENA region and the seas of Europe really provide significant and reliable energy for their own populations and for serving the world energy markets? Will the regions really migrate from a predominantly fossil energy supplier to a clean powerhouse? Will hydrogen really become the “new oil" or the “new LNG"? In past decades renewables had to fight a uphill battle and needed expensive government support. How will hydrogen and e-fuels reach competitiveness? How to utilise market forces to bring markets to net zero? Is it realistic to believe that greenhouse emissions will effectively be penalised and, eventually, be prohibited? How will international cooperation and knowledge exchange be able to accelerate the energy transition in MENA and globally? Who will be the winning developers and technology providers? Will, in a new energy world, energy-intensive industries partially or entirely relocate their production to where the cost-risk ratio is the most economical? What industries will see their business disappearing and/or need to change their business models in anticipation of major shifts in the energy markets? The list of topical questions on these issues is as endless as the useful answers. Let’s explore them.

Integrating the Cheapest - Yet Volatile - Energy Sources China has given an unparalleled boost to the world supply chain for solar and wind technologies. Today, technologies can be set up quickly in places with a lot of sun and wind to supply “standalone" local micro grids or be integrated into regional and international grids.

However, the weather-dependent supply of electricity is significantly changing the traditional value chains from energy source to consumption. Where previously the mainly fossilbased supply was easily controllable, production now depends more and more on the weather gods. Where previously the "stable base load" of coal and nuclear power, together with quickly controllable (gas) turbines and hydropower, carried the energy supply, it is now increasingly solar power plants and wind farms ‒ from huge and centralised to small and decentralised on the roof or in the garden. It is no longer a question of delivering base load, but of delivering flexibility. Base load loses its value in sunny and/or windy hours, because then the output of base load power plants would usually have to be curtailed. On the other hand paradoxically the value of solar energy drops during high sunshine hours when all connected solar systems are feeding into the grid and are causing overproduction.

The parameters of energy supply are, therefore, changing fundamentally. The traditional power supply used to be simple: power plants delivering well dispatched electricity to the grids. In the new "net zero" world all parts of the value chain will actively deliver or be subject to flexibility: power production, conversion of electricity into molecular or thermal energy carriers, storage of energy, smart transport grids, exchange with neighbouring grids, regional and global energy trading and demand response to price signals. The role of short- and long-storage and flexible demand will become pivotal. This includes mobilising price-sensitive behaviour of industries, the commercial sector and households, heat pumps for efficient heating and air-conditioning, electric cars, desalination plants and so on.

This is where hydrogen comes into play as a new, rapidly establishing element. Hydrogen is a promising energy carrier that has the best chance of replacing fossil fuels in the long-term. In principle, clean hydrogen can be produced locally or near large energy sources almost anywhere on earth. To date, hydrogen is not yet competitive without support. On the one hand, the cost of producing hydrogen must decrease substantially, e.g. through technology improvements and economies of scale. On the other hand, fossil energy carriers will, bottom line, become more expensive due to emission restrictions, carbon capturing costs and other measures.

Hydrogen can be produced in large quantities, bonded to other atoms, stored and transported without significant technical problems. The expectation seems justified that emission-free produced electricity, hydrogen and synthetic fuels, will ultimately bridge emission-free production with consumption on a local and global scale.

Traditional energy systems will, therefore, experience a dramatic change in the coming decades. Energy supply and hence, energy prices will become more weather-dependent and therefore more volatile, which implies a greater need for and value of flexibility at all stages of the energy value chain.

How “Renewables” Will Take Over the Market

Today the old, long and heated discussions about which climate neutral technologies are better and whether one should rely on large centralised or small decentralised plants can probably be ticked off. All renewable energies have a fair chance in a fair market, in which there may always be clean fossil or nuclear options. All technologies should compete on the basis of cost per kilowatt hour, controllability, reliability, availability, predictability as well as storability and increasingly important environmental factors and other legal or social limitations.

Of course, the market structure as well as the market model, which is supposed to bring supply and demand together, play an important role. In principle, the market should make a reasonable balance of the essential objectives possible: low costs for consumers, energy security, environmental compatibility ‒ in particular no harmful emissions ‒ and also indirectly acting socio-economic factors such as localisation. The tradable energy products are the physical energy carriers: electricity, molecules and thermalenergy. In principle, these are allstandard products; commodities, which are physically traded locally and/ or, depending on the available transport infrastructure, with neighbouring markets as well as global markets. In Europe, energy markets are free and open to all qualified supply and demand players.

In MENA, most countries only allow limited energy trade, if any, in the power sector. At the same time, the same countries also have plans for a gradual opening, joining Europe and, in the long-term, India and sub-Saharan Africa. An open market leads to more competition and more realistic prices to which market participants can orientate themselves. This can help reduce investment and operating costs and attract external capital more easily.

A “Cap” on Emissions

In Europe, an emissions trading system (ETS) was introduced as early as 2005 to complement the energy markets. It is an instrument of EU climate policy with the aim of reducing greenhouse gas emissions (such as carbon dioxide) at the lowest possible economic cost. A limited number of emission rights are issued and then traded on a market. The system is based on the fact that an operator must present a valid certificate for each ton of carbon dioxide emitted and that there are only a limited number of certificates per year. The system currently covers about 45 per cent of the climate gas emissions generated in the EU. The number of allowances is decreasing by 2.2 per cent per year, and since the demand is decreasing more slowly, they are becoming more expensive. In Europe, about 11,000 plants are covered by this system. The European Commission is striving to include all sectors and significant installations in the ETS system.

A "floor" on Renewable Energy Off-Take

Similar to emission trading and the ETS, based on tradable emission allowances and a cap on emissions, renewables could also effectively be encouraged through requiring a “floor” at the offtake or demand side. This could be done by requiring a minimum percentage of renewable energy in the delivered energy mix (a floor), expressed by a minimum purchase requirement of green certificates (Guarantees of Origin).

As already tested with “green electricity”, the trade of physical energy carriers from renewable sources can be handled through tradable green certificates and a system of “carbon content/ credits/penalties” via existing infrastructures.

Depending on legal regulations, these virtual products, emission allowances and green certificates, or any other carbon content indicator, should preferably be traded separately between relevant markets in conjunction with the physical energy products. The separate tradability of physical energy products and “green or emission certificates" has the advantage that each product ‒ physical energy carriers (electricity, hydrogen, e-fuel, etc.) or virtual characteristics (green, emission certificates) ‒ can be separately priced and traded in its own market.